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http://www.detnews.com/2005/autosinsider/0506/03/C01-202702.htm

GM lays out plan to trim models

Automaker tells dealers that Buick line will be cut back to four or five vehicles.

By Ed Garsten / The Detroit News


Moving to accelerate the consolidation of its Buick, Pontiac and GMC brands into a single sales channel, General Motors Corp. is warning dealers that only sell the Buick line that they'll have fewer and fewer models to sell in coming years.

The message was delivered Thursday during a meeting in Troy of more than 1,000 dealers from the automaker's north-central sales region, including Michigan, Ohio and Illinois.

Dealers that sell only the Buick line could face financial challenges as GM pares its U.S. model line in response to falling demand. Buick sales are down 17 percent this year and GM told dealers that Buick's product portfolio will be trimmed down to four or five vehicles from eight. The vehicles most likely to be cut are the Rendezvous crossover vehicle and the Rainier, a midsize sport utility vehicle.

To reduce product overlap and save marketing costs, GM is realigning its North America brands and model lineup. Chevrolet and Cadillac will become "foundational" brands with the broadest car and truck portfolios. GM's other six brands will see their product lines pared to only models that meet specific, strategic brand images -- such as trucks and SUVs for GMC.

A big piece of that plan includes selling Buick, Pontiac and GMC cars and trucks at a single dealership, rather than at stand-alone stores. About 50 percent of Pontiac, GMC and Buick stores have already been consolidated.

"It's really getting the role right and the three work together," Mark LaNeve, vice president of sales, service and marketing for GM North America, said during a recent interview.

"I told the dealers straight up, I'd rather you've got three or four great Pontiacs that really deliver on that legendary athletic design or performance and three or four great Buicks that are a cut above," LaNeve said.

In recent months, GM has reached out to reassure and rally dealers as part of a broad initiative to revive flagging U.S. sales that contributed to a $1.1 billion first-quarter loss. In May, GM reported a 13 percent decline in sales, and its overall sales are down 6.7 percent this year. Its U.S. market share has dipped to 25.4 percent from 27 percent a year ago.

Livonia Buick dealer John Rogin said he felt no pressure to buy into the so-called "single channel" concept, but is open to converting at some point.

"We've been a single line dealer for 20 years," said Rogin, who also owns a single-line GMC dealership. "Would I and GM ultimately do better if I had all three brands under one roof? Absolutely. If GM has a plan, we'd welcome a discussion."

Jim Bunnell, North-Central regional manager, and Pete Gerosa, GM North America Vice President field sales, service and parts, said Chevrolet will likely market 23 to 26 models, while Cadillac's portfolio will consist of nine to 11 models. Chevrolet now offers 20 models, not counting medium duty trucks and certain derivative model such as Cobolt SS. Cadillac sells nine models, not including high-performance versions.

Hummer will market four to five different models, up from three choices. Saab's product line will have five to seven models, up from its current four, according to dealers attending the meeting.

Collectively, the Pontiac, GMC and Saturn brands will have 22-27 models, GM executives told dealers, without providing details. The three brands sell 18 distinct vehicles and plan to produce at least four additional models.

GM also told dealers it will cut production by 33,000 units in the last three months of the year. Hurt by lower sales and a stockpile of unsold cars and trucks, GM is reducing North American production by about 110,000 vehicles, or 9 percent, in the third quarter. For the year, GM plans to cut output by about 465,000 vehicles, officials told dealers.

GM spokesman Stefan Weinmann declined to comment on GM's future production plans, citing changing market conditions, which may alter production plans.

Dealers are concerned that the production cutbacks, together with a new promotion that offers employee-style discounts to all consumers through July 5, could leave them short of inventory, Rogin said. Dealershave largely dealt with bloated inventories in recent years.

While some dealers may not agree with GM's new strategies, Rogin said he felt optimistic after the meeting, calling it "the most direct, most truthful, most positive meeting anyone could remember."
 

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I think it's all good news and a good idea. I'm kinda amased that they're going to keep growing Chevy and Cadillac too though.
 

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Discussion Starter · #3 ·
I wonder where they really plan to go with Chevy. They seem to have something of just about everything. On the truck side, they probably could use a larger crossover than the Equinox, something between a Honda Pilot and Chrysler Pacifica.

Also, they could use a sporty RWD vehicle under the Corvette. (Camaro?).

Other than that... I just do not know.

Cadillac is curious too. They are planning a smaller Cadillac crossover based on the theta platform (Equinox, Torrent, Vue) which will use a Cadillac DOHC engine instead of the OHV from the Equ/Torrent. However, I wouldn't want to put a car under the CTS, as the price would drop so low it would have to be decontented, and thus hurt the prestigious image. Maybe this is a sign they are still working on an even bigger/more expensive sedan than the STS (think Cadillac Sixteen).
 

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It seems as though GM keeps getting further and further away from what people actually want. Do they really need more Caddies? Not everyone is a rich geezer/balla. And while GM keeps pushing out higher priced cars, other companies are killing them with cheap, reliable, good looking econoboxes.
 

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Discussion Starter · #5 ·
Audio Imagez said:
It seems as though GM keeps getting further and further away from what people actually want. Do they really need more Caddies? Not everyone is a rich geezer/balla. And while GM keeps pushing out higher priced cars, other companies are killing them with cheap, reliable, good looking econoboxes.
Actually, Cadillac has been one of the lone bright spots for GM lately. That brand has been selling extremely well, and has been climbing back up the sales charts. So they are trying to take advantage of it.

Overall, the premium nameplate brands are all seeing growth. More people are trying to step into premium branded cars through leases and longer term loans, instead of going with a regular brand car at a cheaper price.

Plus they have much better profit margins on Cadillacs, so even if they don't sell as many in total volume as another brand, they end up making more money anyway.
 

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Fits in with everything we've been reading lately about the realignment of GM brands.
 

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Basically the right direction.

Buick should have 4 models, tops and no SUVs. Buick should offer a sport coupe at the bottom of the price range, not trying to be all things to all people just a moderately performing fairly light sport coupe. The top Buick should just scrape the bottom of Cadillac luxury. The other should fall somewhere in the midde. The 4th model would be a wildcard - a specialized convertible, or sports car or old fashioned luxoboat or retro or whatever, but not an SUV.

Hummer should have 3 models tops. When Hummer loses it's special :cool: appeal, it will lose its luster. Hummer is pure image. Offer too many, as is being risked now with the H3 and you can kiss that division goodbye. 5 models is way too many. If you ask me, the H3 is all wrong. They should have developed a balls-to-the-wall Rubicon busting lightweight jeep killer IMHO. Something with very high off-road performance completely at the opposite spectrum of the H1. That may not meet the brand image of super-tough vehicles or not. The H3 is already starting to dilute the division. If they offer 5 models then they are going way in the wrong direction with hummer.
 

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Discussion Starter · #8 ·
jimbo said:
Buick should have 4 models, tops and no SUVs.
I agree with basically everything you said except about Buick and SUV's. I think there is room for an SUV in the Buick lineup. Maybe no truck based SUV's, but they could certainly have a near luxury crossover or two. Something along the lines of a Lexus RX330 or Chrysler Pacifica.

A Jeep Wrangler competitor from Hummer is a great idea. However, I am not sure GM wants Hummer's that sell that far down in price to really compete with Jeep. The market is there (Jeep sold a record number of Wrangler's in 2004) but they seem to want to keep Hummer a "premium" nameplate.
 

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Fformula88 said:
I agree with basically everything you said except about Buick and SUV's. I think there is room for an SUV in the Buick lineup. Maybe no truck based SUV's, but they could certainly have a near luxury crossover or two. Something along the lines of a Lexus RX330 or Chrysler Pacifica.
Yeah, that could work.
 

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Discussion Starter · #10 ·
jimbo said:
Yeah, that could work.
The only reason I even mentioned it is because GM has had some success with the Buick Rondezvous. It is essentially a reskinned Pontiac which we all know did not do so well. So if Buick could turn that into a success, they should be able to peddle a real crossover. Otherwise, your right. No Escalades, Trailblazer clones, etc for Buick.
 
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